A month after property curbs took effect, prices suffer first monthly drop in a year

Resale prices of private non-landed homes last month dipped for the first time in 12 months after property cooling measures took effect in July.

Condominiums and private apartments saw a 0.2 per cent decline in prices in August from the previous month, according to the latest flash estimates from real estate portal SRX Property released yesterday.

Some market observers were expecting private resale prices to stay in positive territory for the rest of the year but rise at a slower pace after higher additional buyer's stamp duty (ABSD) rates and tighter loan-to-value limits kicked in on July 6.

The volume of transactions also saw a big drop last month, with an estimated 694 private non-landed homes resold, down 35.3 per cent from 1,072 units in July.

Year on year, the resale volume was 48.2 per cent lower than the 1,339 units moved in August last year.

Commenting on the data, OrangeTee & Tie research and consultancy head Christine Sun said: "These down trends may be an early indication that resale prices may have peaked in some residential segments and are starting to soften under the current cooling measures."

With the dip last month, the 9 per cent rise in resale prices so far this year has come down slightly to 8.8 per cent. Compared to a year ago, prices are 11.2 per cent higher than in August last year.

The resale prices of apartments in the city fringe or Rest of Central Region fell 1.6 per cent from July, while those in the prime district or Core Central Region dipped by 0.3 per cent.

These are homes more likely to be bought for investment or speculative purposes and to which the higher ABSD rates and loan limits are likely to apply.

In contrast, resale prices of units in the outlying areas or Outside of Central Region, which are more likely to be bought by genuine homebuyers, continued on the uptrend, rising 0.8 per cent last month.

In another indication of the wind coming out of the sails of the resale market, the premium that buyers are prepared to pay over market value continued to decline after a sharp drop in July, going by another SRX measure.

The overall median Transaction Over X-value (TOX) fell to zero last month, after falling to $4,000 in July from $17,000 in June, before the latest cooling measures.

TOX measures how much a buyer is overpaying or underpaying on a property based on SRX Property's computer-generated market value.

Noting that more than half the districts recorded either zero or negative median TOX, meaning more people sold below valuation, Ms Sun said this "may indicate that the winds have shifted from a seller's to a buyer's market". - THE STRAITS TIMES